NOTE 11 - STOCK OPTIONS | exercise price which is not less than the fair value on date of grant, except that the exercise period of options granted to a stockholder owning more than 10% of the outstanding capital stock may not exceed 5 years with the exercise option price not less than 110% of the fair value of the common stock at date of grant. The options granted vest between 2 and 5 years. At December 31, 2014, the Company increased the number authorized options under the 2004 Plan to 11,954,960. As of December 31, 2018, the plan was terminated and no further options may be granted under this plan. On September 27, 2012, the board of directors and the stockholders of the Company approved a stock option plan (“2012 Plan”), which provides for the initial granting of options to purchase up to 5,000,000 (with a 4% annual increase per year) shares of common stock, pursuant to which officers, directors, advisers and consultants are eligible to receive incentive and/or non-statutory stock options. Each option agreement shall set the terms of the option. However, incentive stock options are limited to an expiration not to exceed 10 years. Under the plan, the exercise price shall not less than the fair value on date of grant, except options granted to a stockholder owning more than 10% of the outstanding capital stock whereby the exercise option price not less than 110% of the fair value of the common stock at date of grant. During the year ended December 31, 2016, the Company granted 600,000 options to consultants and 2,300,000 options to officers. For the years ended December 31, 2018 and 2017, the Company recorded expense of $19,226 and $26,114, respectively, for vested portion of share-based compensation relating to the issuance of these stock options. During 2016, the Company granted 200,000 stock options to a consultant that will vest upon obtaining certain regulatory approval and submission of an IND application to the FDA. These stock options are accounted for as variable performance based option awards and will be adjusted each reporting period to reflect the estimated fair value until such approvals and filings are obtained. The fair value of these options as of December 31, 2018 and 2017 is $18,172 and $32,991, respectively. The change in value of $(14,819) and $(7,930), has been included with stock based compensation for the years ended December 31, 2018 and 2017, respectively. Stock options activity under the plans is summarized as follows: Number of Stock Options Weighted Average Exercise Price Outstanding – December 31, 2016 12,289,999 $ 0.07 Options granted - - Options expired - - Outstanding - December 31, 2017 12,289,999 $ 0.07 Number of Stock Options Weighted Average Exercise Price Outstanding - December 31, 2017 12,289,999 $ 0.07 Options granted - - Options expired (500,000) $ 0.20 Outstanding - December 31, 2018 11,789,999 $ 0.07 Options vested and expected to vest – December 31, 2018 11,514,999 $ 0.07 As of December 31, 2018, no options are available for future grant under the 2004 Plan and 3,890,000 options are available under the 2012 Plan. A summary of the options outstanding and exercisable as of December 31, 2018 is as follows: Weighted Weighted Average Number of Average Remaining Aggregate Stock Exercise Contractual Intrinsic Options Price Life in Years Value Options outstanding 11,789,999 $0.07 1.87 $1,544,800 Options vested and expected to vest 11,514,999 $0.07 1.86 $1,511,800 The following table summarizes information regarding outstanding stock option grants as of December 31, 2018: Outstanding Exercisable Range of Exercise Prices Granted Stock Options Outstanding Weighted- Average Remaining Contractual Life (Years) Weighted- Average Exercise Price Granted Stock Options Exercisable Weighted- Average Exercise Price $ 0.01-0.05 6,659,999 1.85 $ 0.04 6,659,999 $ 0.04 0.08-0.10 3,570,000 2.38 0.08 3,295,000 0.08 0.17 1,560,000 0.80 0.17 1,560,000 0.17 $ 0.01-0.17 11,789,999 1.87 $ 0.07 11,514,999 $ 0.07 The following is a summary of the status of the Company's non-vested stock options as of December 31, 2017 and the changes during the year ended December 31, 2017: Weighted Number of Average Stock Grant-Date Nonvested Stock Options Options Fair Value Nonvested as of January 1, 2017 875,000 $0.08 Granted - - Vested 300,000 $ 0.08 Forfeited - - Nonvested as of December 31, 2017 575,000 $0.08 The following is a summary of the status of the Company's non-vested stock options as of December 31, 2018 and the changes during the year ended December 31, 2018: Weighted Number of Average Stock Grant-Date Nonvested Stock Options Options Fair Value Nonvested as of January 1, 2018 575,000 $ 0.08 Granted - - Vested 300,000 $ 0.08 Forfeited - - Nonvested as of December 31, 2018 275,000 $0.08 The Company did not grant any stock options during the year ended December 31, 2018. On January 15, 2019 the company granted 3,825,000 options to members of the Board of Directors. The options are fully vested upon grant, exercisable at $0.35 and expire in 5 years. |